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In third place was Red Peak, followed by the black and white silver fern, and them the koru.

The proportion of "informal votes", which included spoiled ballot papers, was relatively high, at 9.7 per cent.

This was likely to be the result of protest votes from people who did not want a change of flag.

The turnout so far was 1,527,042 people, or 48.16 of the voting population - higher than the last postal referendum but relatively low for a constitutional issue.

The Government expected much greater voting numbers in the second referendum, which will be held in March.

The alternative flag design placings, from one to five, match Prime Minister John Key's own rankings.

A spokeswoman for Mr Key said he was pleased that more than 1.5 million New Zealanders participated, which was on par with other postal referendums.

"The Prime Minister has always been a fan of the Lockwood designs. It's important to note that this is just a preliminary result, with a small chance the preferred flag could change between now and the final result on Tuesday.

"Once we have the final result, New Zealanders will have a clear choice whether to change our flag or keep our existing one."

New Zealand First leader Winston Peters wrote "keep our flag" on his ballot paper, meaning it would be counted as an informal vote.

He said the fact that 149,022 people had cast informal votes (9.7 per cent) was "terribly high", and showed the level of discontent over the flawed process.

The vote had made it even more clear that the vast majority of New Zealanders did not want any flag change, Mr Peters said.

The NZ First leader was no fan of tonight's winner.

"It must be glaringly obvious that you can't have a silver fern that is black, white and blue."

Deputy Prime Minister Bill English, the minister responsible for the flag consultation process, said the results showed strong public interest.

"While this is a preliminary result, New Zealanders can now turn their attention to deciding whether to keep the current flag, or replace it," Mr English said.

Labour leader Andrew Little said the alternative flag was always likely to have a silver fern on it given the final five options.

"The informals were nearly 10 per cent, which was a very high proportion, and the fact that there will be some people who voted for the other flags who won't like the blue and black design, plus the fact that it was still under 50 per cent return, suggests we are on track to have no change to our flag.

"And I think people will rightly ask what have we got for $26 million."

Labour has condemned the flag choice process, saying the $26 million price tag was too steep and the first referendum should have asked voters if they wanted a change.

The Returned and Services' Association (RSA) had urged people to spoil their ballot papers in protest at a change of flag.

RSA national president BJ Clark said he was still confident the current flag would be retained despite the selection of Kyle Lockwood's blue and black silver fern flag.

"It doesn't change anything for us. A flag obviously was going to be selected so now we can get on with leading up to the second referendum.

"It didn't matter which flag was selected, obviously, that was just going to be one that is going to be put up against the current flag," Mr Clark said.

The preliminary result has elicited a flurry of comments from New Zealanders, including ministers and celebrities, on social media.

National minister Nikki Kaye said she was still hoping Kyle Lockwood's red and blue flag would be chosen

"Preliminary #nzflag result is Silver Fern (Black, White and Blue) is ahead but it's very close with Silver Fern (Red, White and Blue). I am hoping this still wins in the final count. I love this flag," she tweeted.

New Zealand singer Lizzie Marvelly, however, wasn't too impressed.

"Actually, though, that particular Lockwood #nzflag was the one I hated the most. I mean, are the people that voted for it blind?" she tweeted.

Marvelly pointed out less than half of eligible voters had actually voted in the referendum.Prime Minister John Key, who wanted a change of flag, launched the two-stage referendum March 2014.

A Flag Consideration Panel began taking public submissions for flags earlier this year and shortlist of 40 flags was released in August.

The panel cut the shortlist to four designs in September, which was later expanded to five, and voting began three weeks ago.

The referendum process has prompted fierce debate across the country. The biggest disagreement has been about whether the flag should be changed at all.

But there has also been criticism about the absence of designers on the panel which choose the alternative designs, and heated discussion about the flags which were selected for the final list.

Both the Labour Party and New Zealand First wanted the $26 million referendum to be scrapped, in particular if the vote at the first stage was lower than 50 per cent.

New Zealand First leader Winston Peters cast a protest vote by writing "keep our flag" on his ballot paper.

Mr Little would not reveal his first preference but hinted that he had chosen Red Peak.

Mr Key initially supported a silver fern on a black background, but after comparisons were made to the Isis flag he changed his preference to the Silver Fern (Black, White and Blue).

The Green Party successfully lobbied for the inclusion of Red Peak on the list final of five flags, following a groundswell of support for the design on social media.

Get two flags free to put on display before next referendum

People can now contact the Flag Consideration Project and be sent two flags for free, the current flag, and the black, white and blue silver fern, as long as it survives any push from late ballots.

The two flags will be available at no cost to those who have the ability to fly them together in a publicly visible location.

That would ideally mean two separate flag poles that can be seen if a person is standing in one place.

Recipients of the free flags will also be asked to fly the current New Zealand flag that is supplied, so the two flags are of the same quality and dimension.

The flags can be sent out after last night's preliminary result is officially confirmed on Tuesday.

The second postal referendum is from March 3-24 next year.

In the lead-up, the project will continue promotions, with materials featuring both the alternative and current flag.

Whether New Zealanders choose to ditch or keep the current flag, March 24 will bring to a close a process that officially began in October last year when Prime Minister John Key announced that a two-stage referendum would be held on the issue.

Mr Key had previously raised the idea of a flag change referendum, and proposed the model for how alternative flags could be chosen in a speech to the University of Victoria in March last year.

Close to 10,300 alternative designs were eventually submitted by the deadline in July, and foreign media had fun highlighting offbeat designs such as Laser Kiwi.

In August, the long-list of 40 was released, and public interest and debate heightened when the final four were chosen by the Flag Consideration Panel in September.

A social media campaign for a discarded option, Red Peak by Aaron Dustin, gained traction, but calls for its inclusion as a fifth option were initially dismissed by the PM.

With support for Red Peak growing, the Green Party found a way around disagreement between National and Labour as to how it could be included.

Greens MP Gareth Hughes successfully introduced legislation to add it to the ballot.

People wanting to request the two flags should email info@flag. govt.nz with contact information, as well as photos of the flag poles on which the flags will fly, and information such as a map or sketch showing where the flag poles are in relation to each other.